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the_new_industrial_state [2010/01/26 15:39]
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the_new_industrial_state [2019/11/08 10:39] (current)
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| Less frequently celebrated, there has been a vast increase in the human effort expended in advertising. "In its cost and the talent it commands, this activity is coming increasingly to rival the effort devoted to the production of goods."((p23.)) Union membership is no longer increasing, having peaked at 25.2 per cent of the workforce in 1956 and having declined since. There has been a large increase in enrolment in higher education, and a somewhat lagging increase in funding. | Less frequently celebrated, there has been a vast increase in the human effort expended in advertising. "In its cost and the talent it commands, this activity is coming increasingly to rival the effort devoted to the production of goods."((p23.)) Union membership is no longer increasing, having peaked at 25.2 per cent of the workforce in 1956 and having declined since. There has been a large increase in enrolment in higher education, and a somewhat lagging increase in funding. |
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| These changes should be seen holistically. In sum, they create the need and the opportunity for large industrial organisation. Economic systems tend to converge on the large, bureaucratic industrial system. There shape is thus more determined by technology and organisation than by ideology. | These changes should be seen holistically. In sum, they create the need and the opportunity for large industrial organisation. Economic systems tend to converge on the large, bureaucratic industrial system. Their shape is thus more determined by technology and organisation than by ideology. |
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| The traditional and pedagogically convenient view of America as a free market capitalist economy dominated by small firms with little capital is a poor representative of a substantial part of the economy. It is a reasonable description of many remaining industries, such as agriculture, truck mines, painting, musical composition, much writing, the professions, some vice, handicrafts, some retail trade and a large number of repairing, cleaning, refurbishing, cosmetic and other household and personal services. However, this is not the sector of the economy under change. The Industrial System as we shall call it, consisting of 500-600 corporations in sectors such as communications, production and distribution of electricity, transportation, manufacturing and mining, much retail trade and entertainment is very different in character, poorly described by economists and the source of the visible and important changes in the economy. The industrial system is a dominant feature of the Industrial State. | The traditional and pedagogically convenient view of America as a free market capitalist economy dominated by small firms with little capital is a poor representative of a substantial part of the economy. It is a reasonable description of many remaining industries, such as agriculture, truck mines, painting, musical composition, much writing, the professions, some vice, handicrafts, some retail trade and a large number of repairing, cleaning, refurbishing, cosmetic and other household and personal services. However, this is not the sector of the economy under change. The Industrial System as we shall call it, consisting of 500-600 corporations in sectors such as communications, production and distribution of electricity, transportation, manufacturing and mining, much retail trade and entertainment is very different in character, poorly described by economists and the source of the visible and important changes in the economy. The industrial system is a dominant feature of the Industrial State. |
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| Thus, significant decision-making in all large corporations is undertaken by groups. This has lead to a fundamental change in the form of bureaucratic hierarchy. The main difference is that it is no longer realistic for a superior to overrule a group decision, as it is for a superior to overturn a decision made by an individual. In the absence of committee decision-making, it is generally feasible for a manager to reappraise any decision made by a subordinate, assess all of the information used to make that decision personally, and overturn the decision if appropriate. It is almost never possible for an individual to adequately appraise a committee decision --- otherwise a committee would not have needed to be formed in the first place. Only a second committee containing a similar range of talent and expertise would be in a position to do so, and in practical terms this is almost never a remote possibility. Thus, ultimate power in decision-making is now becoming firmly embedded within groups somewhere in the middle of the hierarchy of corporations. Whilst upper management retains the formal power to ratify decision-making, in truth he cannot competently decide anything, and indeed interference in committee decision-making can be dangerous --- it can easily undermine the efficient process of group decision-making. The only power that remains with those above such committees in the hierarchy is that of selecting the men that comprise the committees, constituting and reconstituting these groups. The Technostructure is suggested as a collective term for all those involved in group decision-making and the organisation which they form. | Thus, significant decision-making in all large corporations is undertaken by groups. This has lead to a fundamental change in the form of bureaucratic hierarchy. The main difference is that it is no longer realistic for a superior to overrule a group decision, as it is for a superior to overturn a decision made by an individual. In the absence of committee decision-making, it is generally feasible for a manager to reappraise any decision made by a subordinate, assess all of the information used to make that decision personally, and overturn the decision if appropriate. It is almost never possible for an individual to adequately appraise a committee decision --- otherwise a committee would not have needed to be formed in the first place. Only a second committee containing a similar range of talent and expertise would be in a position to do so, and in practical terms this is almost never a remote possibility. Thus, ultimate power in decision-making is now becoming firmly embedded within groups somewhere in the middle of the hierarchy of corporations. Whilst upper management retains the formal power to ratify decision-making, in truth he cannot competently decide anything, and indeed interference in committee decision-making can be dangerous --- it can easily undermine the efficient process of group decision-making. The only power that remains with those above such committees in the hierarchy is that of selecting the men that comprise the committees, constituting and reconstituting these groups. The Technostructure is suggested as a collective term for all those involved in group decision-making and the organisation which they form. |
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| ===== The Corporation ===== | ===== The Corporation ===== |
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| Dominant trends in the development of the corporation have been ignored by economics, although there are great differences between different types of corporation. It will be useful to distinguish between the Entrepreneurial Corporation, in which due to limited requirements planning it is still feasible for the corporation to be understood and managed by a single individual, and the Mature Corporation, in which effective control has passed decisively and irrevocably to the technostructure. | Dominant trends in the development of the corporation have been ignored by economics, although there are great differences between different types of corporation. It will be useful to distinguish between the Entrepreneurial Corporation, in which due to limited planning requirements it is still feasible for the corporation to be understood and managed by a single individual, and the Mature Corporation, in which effective control has passed decisively and irrevocably to the technostructure. |
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| The most obvious requirement of planning is size. This is not properly understood. Economists have suggested that corporations are large because of technical economies of scale or because of a desire to use market power to inflate prices. Both are partial answers. Technology dictates large size but does not explain wide diversification. Planning in a sense requires market power, but it is the power to control supply that is often inadequately provided by the market, the stabilisation of demand, provision of capital and the general minimisation of risk. The larger the corporation, the easier this planning becomes. | The most obvious requirement of planning is size. This is not properly understood. Economists have suggested that corporations are large because of technical economies of scale or because of a desire to use market power to inflate prices. Both are partial answers. Technology dictates large size but does not explain wide diversification. Planning in a sense requires market power, but it is the power to control supply that is often inadequately provided by the market, the stabilisation of demand, provision of capital and the general minimisation of risk. The larger the corporation, the easier this planning becomes. |
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| > The price that the industrial system must pay for its people and the conduct of its research is the support of general enlightenment. ---p367 | > The price that the industrial system must pay for its people and the conduct of its research is the support of general enlightenment. ---p367 |
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| ===== The Political Lead ===== | ===== The Political Lead ===== |
| At this moment there is a considerable if rather unfocused atmosphere of dissent amongst younger people. As yet it has no coherent political leadership. This ought to come from the scientific and educational estate. It has the required scepticism about the industrial system's objectives and current trends in foreign policy under the guidance of the industrial system. Since World War II, scientists have already emerged as an independent political force, especially where science imposes on foreign policy. The nuclear test ban treaty of 1963, for example, would not have been achieved without the initiative of the scientific community. | At this moment there is a considerable if rather unfocused atmosphere of dissent amongst younger people. As yet it has no coherent political leadership. This ought to come from the scientific and educational estate. It has the required scepticism about the industrial system's objectives and current trends in foreign policy under the guidance of the industrial system. Since World War II, scientists have already emerged as an independent political force, especially where science imposes on foreign policy. The nuclear test ban treaty of 1963, for example, would not have been achieved without the initiative of the scientific community. |
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| > General public and political awareness of the dangers of nuclear conflict, the desirability of détente with the Soviet Union and the technical possibilities for disarmament owes a great deal to the scientific community. It owes very little to the military, diplomatic and industrial community. ---p375 | > General public and political awareness of the dangers of nuclear conflict, the desirability of détente with the Soviet Union and the technical possibilities for disarmament owes a great deal to the scientific community. It owes very little to the military, diplomatic and industrial community. ---p375 |
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| Economists are more or less useless in this role. Where economic goals are of central importance, economists are useful --- in a wider debate that considers production against goals which cannot by analysed using the economist's toolbox, he ought to be marginalised, even if his technical understanding is greater than those with a more balanced perspective. Economists are the natural ally of the industrial system. Recently, so has the liberal been --- to be a liberal in recent times has meant to be an economic liberal, espousing increased production, employment, management of aggregate demand and greater equality of wages. These are no longer an appropriate liberal platform --- they need no liberal advocacy to be enacted, the industrial system is more than capable of fighting their corner unaided. The liberal economic programme, in other words, has run its course --- it is time to find a new one. | Economists are more or less useless in this role. Where economic goals are of central importance, economists are useful --- in a wider debate that considers production against goals which cannot by analysed using the economist's toolbox, he ought to be marginalised, even if his technical understanding is greater than those with a more balanced perspective. Economists are the natural ally of the industrial system. Recently, so has the liberal been --- to be a liberal in recent times has meant to be an economic liberal, espousing increased production, employment, management of aggregate demand and greater equality of wages. These are no longer an appropriate liberal platform --- they need no liberal advocacy to be enacted, the industrial system is more than capable of fighting their corner unaided. The liberal economic programme, in other words, has run its course --- it is time to find a new one. |
